Last month, a big step toward changing the format in which you can hold shares of stock occurred. Financial securities, such as stocks and bonds, were converted into digital tokens. The tokens were then traded and settled on a blockchain—the same technology underlying cryptocurrencies—instead of through the traditional process.

This was not some far-fetched experiment either. More than 30 financial firms participated, including BlackRock, CME Group, Goldman Sachs, Invesco, J.P. Morgan, S&P Dow Jones Indices, Vanguard and others.

News about the trial came out as I was finalizing an article for this issue about a related development. Transfer agent Computershare is supporting publicly traded companies that choose to make their shares available in a digital format and tradable on a blockchain.

Specifically, Computershare is supporting issuer-sponsored tokens (ISTs). ISTs are just like paper stock certificates or the stocks held in our brokerage accounts in terms of what they represent: full equity ownership. IST ownership gives you the ability to vote your proxy and receive dividends, if the company pays them.

ISTs are held in a digital wallet instead of through a brokerage account. You can trade them on an approved blockchain anytime you want, subject to any requirements set by the issuer or the blockchain. Settlement of IST transactions occurs immediately instead of one business day after the transaction.

The format in which you and I own stocks is not going away. ISTs are simply another form of stock ownership available to you. All of us will still be able to keep our share ownership through a broker. Holding shares outside of a broker—either electronically (“a book-entry position”) or via physical certificates—will still be possible too.

To provide you with a deeper understanding of this change, I spoke with Peter Duggan, an executive vice president with Computershare. Many of you may be familiar with the company’s name via shareholder communications. As a transfer agent, Computershare manages shareholder registries for many companies, among other services.

Our conversation went beyond tokenized shares to how share ownership is tracked and updated. It is a fascinating look behind the scenes that will help you understand how you are actually recognized as a shareholder of a company. 

Wishing you prosperity and good health,